Sean Cusack Interview - 28th May 2007

The name Sean Cusack will be familiar to many of our investors. As the Managing Director of Le Jardin de Fleur group of resorts on Mediterrania Saidia, Morocco, Mr Cusack has been heavily involved in marketing these prestige developments personally, and even hosts all those reserving clients who make the weekly inspection trip by private jet over to Mediterrania Saidia to view their investment. The International Property Investment Network - (IPIN) enjoys a close working relationship with Mr Cusack who kindly took part in a Q&A session with our press team.

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Sean Cusack

PS = Propertyshowrooms.com
SC = Sean Cusack

PS: Firstly Sean, could you tell us a little about Villas de la Plage and the main investment points our IPIN members should be aware of?

SC: The investment points for Villas de la Plage are: proximity to the beach, outstanding design and value for money with a later completion date (approximately 2010), giving plenty of time for your clients' investment to mature.

PS: Le Jardin de Fleur resorts are considered as top-end Moroccan investments, mainly due to location and all round package. Can we expect any lower cost projects from you in the near future, such as apartment phases with starting prices between the 150,000 EUR and 200,000 EUR mark? If such projects are not in your plans, you are obviously confident in your target market base. Perhaps you could clarify this for us?

SC: Unfortunately, we do not have any other apartment plots, and in fact, as you are probably well aware, we only have VVT-11 and VVT-12 to release. These projects are actually almost ready for release and it looks likely that the townhouses in VVT-12 will be around the 220.000 EUR mark. This will be the cheapest price point that we will be able to offer this year.

PS: Along similar lines as the previous question, there has been a recent surge in alternative new product throughout Morocco. Some good, some bad of course! How do you plan to remain competitive with new investment product on the market, considering Jardin de Fleur is such a well known brand, and many investors look to get in early on their chosen investments?

SC: We consider ourselves in a good position to judge product and price-point as we have sold in excess of 750 properties with a value exceeding 270 million EUR in the last year including VVT-7 and VVT-9 which - as you know - has mainly been sold to international sportsmen. Market sentiment can change very quickly and we like to think we can adapt relatively quickly to market demands.

PS: We know that Sur Mer is already well under way in Saidia phase 1, but what about your apartments on RT7 and the original Jardin de Fleur Golf Villas for example? Originally, construction was due to commence in November of 2006. What has been the reason for delay, and do you have a latest projection?

SC: The main reason for the delay in RT-7 has been a combination of things, i.e. our technical drawing team in Morocco being incredibly slow and the planning authorities consists of 16 individual urban architects who act as a panel but also need to be consulted on an individual basis; all of them need to give their signature to the license. As you can imagine, this has impacted on our start dates, however, we have recently complained to the Government in Rabat and highlighted the shortcomings in the system of obtaining final building licenses. They have assured us, they are looking at shortening the time considerably for the future.

I also would like to point out that even though we have not been building on RT-7, we have been preparing and compacting the 72.000 m2 of land that will be built on and this alone has taken 3 ½ months. Actually, we are not as far behind schedule as it perhaps appears.

Artist impression of the new Saidia promenade

PS: When construction commences, will you have a speculated webcam facility available to buying clients, enabling them to monitor their units build progress? Along the same lines, do you have ongoing updates planned throughout construction for clients, and if so how often?

SC: Had we known about some of the technical problems in broadcasting high definition web-images via Moroccan ADSL providers, we would never have published the fact that we were about to set up a webcam. We used a Spanish company to advise us and set the camera installation up; it was working very well for a number of weeks but kept failing and needed to be reset constantly, having to go to the location of the camera with a laptop to reset it. Anyway, to cut a long story short: we have contracted a Moroccan company to re-assess our needs and get the webcam working.

We are currently building a new Construction progress section on our website, which will be updated with the most up-to-date images weekly. This should be ready by the end of this week.

PS: There has been some confusion recently among buyers in Morocco relating to the clarification of ‘Touristic' and ‘Non-Touristic' plots. What effect do these classifications have on our members' investments, as the majority of Moroccan lawyers seem to have overlooked this whole issue during the buying process? Could you help us to clarify the situation, and how Le Jardin de Fleur resorts are affected, if at all?

SC: The only difference between “touristic” and “non-touristic” is touristic plots have to have large clubhouses and plenty of amenities and most importantly have a property and rental management company established to maintain all of the facilities and to promote the rentals of the individual properties for the clients who wish to join the rental pool. The ratio of clients wishing to rent or not to rent will determine the type of company that will run it. It is only a suggestion which is attached to the touristic laws that the 70% - 30% ratio should encourage an advantageous operator.

LJDF will endeavor to provide a management contract with suitable guarantees from an operator that will encourage the owner to rental pool. We can only see this as an advantage to an individual's investment as this will mean good rental income, a busy environment and profitability of restaurants and bar facilities within the project.

Also, the prospect of being able to exchange the use of your property - if rented - to use other Le Jardin de Fleur properties is subject to an agreement with an operator. Example: You own a 2 bedroom, 2 bathroom apartment in Sur-Mer and you would like to holiday in your apartment for a long weekend in July. You contact the LJDF operator, they tell you that your apartment is let over this particular period, so instead you are offered either the equivalent on Sur Mer if possible or perhaps you might decide you would like to stay for the long weekend in the 5* Sahara Resort, as you are only planning a short luxury weekend and want to take advantage of the beach front location and the 5* facilities. Conclusion: Receiving rent from the rental pool while still being able to choose where you want to stay, subject to “certain” terms and conditions to be formalized at a later stage by the operator.

Spain on average during low-season has about 7% occupancy. As I well know living in Spain, the vast majority of all holiday complexes, apartments, villas etc. is like a ghost town. If you were to rent out an apartment, you would probably be the only one there.

PS: One of the reasons IPIN has promoted Saidia and Le Jardin de Fleur in particular since early 2006, is the rental potential on the resort. Do you have your own rental management plans in place for Jardin de Fleur owners at this stage?

SC: We have some very exciting possibilities for our clients but all of these negotiations are in the early stages at the moment but include several companies that own their own airlines.

PS: Is there any update at this time on flights into Oujda with Ryanair for example? We know that landing slots have been negotiated, but I know that many investors are waiting with interest for schedule announcements. What is the latest?

SC: Just in case you were not aware, there are two hotel operators who have bought hotels from Fadesa that run their own airlines. One of which is going to be called “The Grand Saïdia Oasis” which is owned by a company called Globilia who incidentally owns Air Europa. Iberostar, which is another hotel owner, also has its own airline called Iberworld. (http://www.iberworld.com/web/es/index.aspx)

Oujda Airport terminal

Other possibilities include Virgin Express, GBAirways; and that is everything we know for the time being. However, we will be organizing a monthly flight from Stanstead to Oujda. The first date will be the 29th June, subject to confirmation.

The Oujda airport is about to be completely renovated and expanded, with 2 new runways and a new terminal building which can dock 25 planes at any one time. This, combined with the already started works in Saidia town, shows just how committed they are to Saidia and tourism.

PS: It has become apparent from our market research that many legal companies seem to provide conflicting information in the area of land ownership and building licenses. Is there any way you can clarify the plot ownership and building license set-up within Saidia, and the relationship between yourself, Fadesa and the government in terms of legalities of sale?

SC: Many of Morocco's property ownership laws are out of date. The government is aware of this and whilst these laws are being changed, they have issued an agreement in the form of a convention with Fadesa who in turn have passed this us and other developers. I understand it can be confusing at times with so many different opinions being put forward, some of which are provided by other less successful developers and agents in Morocco.

On this subject, can I remind everybody that this very same problem surrounded Dubai, where many hundreds of thousands of properties were sold off-plan without knowing whether the Rulers of Dubai were even going to allow foreign ownership? And actually, even now it is not 100% clear. In Morocco, foreigners are allowed and have always been allowed to own freehold property. Just to clarify things even more, Fadesa are about to complete their Magnum apartments project; this is a touristic project (with clubhouse and facilities) and will be delivered with full title deeds.